Generally, civilian service performed for the federal government or the U.S. Postal Service may be creditable for retirement purposes. Military service may be creditable under certain circumstances (see 582.7).
The following service is creditable civilian service under FERS
- Service performed after December 31, 1986, for which deductions were not refunded to the employee.
- Service performed prior to January 1, 1989, that would have been creditable under CSRS rules provided the employee was subject to retirement or has made a deposit for the service, neither of which has been refunded to the employee since becoming subject to FERS.
- Service performed on or after January 1, 1989, when deductions for the FERS basic were withheld from salary provided such deductions were not refunded to the employee.
- Service performed under CSRS prior to transferring to FERS provided deductions were not refunded to the employee after becoming subject to FERS. (This CSRS time became FERS upon transferring.)
Generally, full–time credit is allowed for periods of government employment between the dates of an employee’s appointment and separation.
Credit is not allowed for that period which exceeds 6 months of LWOP in a calendar year.
Periods of separation of 3 calendar days or less are not deducted in computing total creditable service.
Periods of LWOP while performing military service are not included when determining LWOP in excess of 6 months in a calendar year (see 582.13).
Periods when the employee was receiving OWCP benefits are not considered breaks in service (see 582.4).
Service for which deductions were refunded to the employee after becoming subject to FERS is no longer creditable for either eligibility to retire or calculation of the annuity. Once refunded, deductions may never be redeposited.
Retirement benefits that include part-time employment will be prorated by a ratio of the part-time hours worked to the number of hours a full–time employee would have worked.
Credit is allowed for the entire period that an employee receives OWCP benefits if the employee is carried on the Postal Service rolls in LWOP status.
Credit is allowed for a period of separation during which a former employee (not an annuitant) was in receipt of OWCP benefits, provided the employee is later reemployed in the Postal Service (or federal service). Annuitants who are reemployed after a period of separation during which they received OWCP benefits in lieu of an annuity receive credit for the separation only after they have qualified for a redetermination of the annuity. See 586.65, Reemployed 5 Years or More.
An employee whose separation or suspension is determined to have been improper and who is restored retroactively is considered for retirement purposes as having properly been in the service during the intervening period of erroneous separation or suspension.
If restoration is with entitlement to pay, the employee’s basic pay over the intervening period is subject to regular retirement deductions and the employee receives credit for the entire period.
If restoration is without entitlement to pay, retirement credit is allowed for as much of the intervening period without pay as does not exceed 6 months in a calendar year (see 582.13).
If an employee is granted LWOP to serve as a full–time officer or employee of an organization composed primarily of federal and/or postal employees, the following action must be taken:
- Employing office:
- Notify the employee of his or her right to elect, in writing, within 60 days, to continue retirement coverage, subject to payment of the required contributions that would have been deducted had she or he been in a pay status.
- Set up a follow–up system to remind the employee that election must be filed within 60 days of beginning LWOP.
- If, after being contacted, the employee refuses to make an election, document the action taken. Failure to make an election is considered an election not to continue retirement coverage. A copy of the election (or employing office’s documentation) is filed in the employee’s OPF.
- Employee:
- File an election to continue retirement coverage for as long as in LWOP. The election must be filed with the employing office within 60 days of entering LWOP.
- Pay or arrange to have paid to the Eagan ASC (if election is to continue retirement coverage), on a current basis, both the employee and agency contributions that would be applicable if employee were in a pay status.
- Payment of the employee and agency contributions must be completed and not refunded to the employee.
Note: If an employee on LWOP serving as a full time officer or employee of an employee organization declines to continue retirement coverage, none of this time is creditable for retirement purposes.
Honorable active service in the Armed Forces of the United States; in the commissioned corps of the Public Health Service after June 30, 1960; or in the commissioned corps of the National Oceanic and Atmospheric Administration after June 30, 1961, can become creditable service upon completion of the required military deposit. Military service does not include service in the National Guard except when ordered to active duty in the service of the United States.
Military service performed prior to January 1, 1957, is creditable for retirement. No deposit is required for this service to be creditable.
Military service performed after December 31, 1956, is creditable only when a deposit is completed prior to separation from service (see 582.76).
Military service must have been performed before the date of separation from the service and must have been terminated by honorable discharge or under other honorable conditions.
An employee may not receive credit for both civilian service and military service covering the same periods of time.
The amount of deposit for post–1956 military service is 3 percent of basic military pay plus applicable interest.
The following provisions apply:
- Grace Period. No interest is charged if the deposit is completed by December 31, 1989, or prior to completion of 3 years from the date an employee becomes subject to FERS, whichever is later.
- Rate of Interest. Interest is charged at a rate as determined by the Secretary of the Treasury for each calendar year that equals the overall average yield to the Fund during the preceding fiscal year from all obligations purchased by the Secretary.
Receipt of military retired pay bars the crediting of military service toward the FERS basic annuity except when one of the following conditions is met:
- The retired pay is awarded for a service–connected disability incurred in combat with an enemy of the United States; or
- The retired pay is awarded for a service–connected disability caused by a instrumentality of war and incurred in the line of duty during a period of war; or
- The retired pay is awarded under Chapter 67 of Title 10, United States Code; or
- The employee waives the military retired pay.
In all of the above situations the military service is subject to the post–1956 military service deposit requirements (see 582.73).
An applicant for retirement receiving military retired pay which bars the use of the military service in the computation of a FERS basic annuity may elect to give up military retired pay. The military service represented by the retired pay is then subject to the normal deposit requirements. After waiving the military retired pay and completing any required deposit, the service may be added to the civilian service in computing the FERS basic annuity.
An employee who decides to waive military retired pay:
- Completes the required post–1956 military service deposit at any time prior to retirement.
- Notifies the appropriate Military Finance Center, at least 60 days before the retirement date, of the decision to waive military retired pay in order to utilize the military service in computing the FERS basic annuity. The notice includes:
- The employee’s full name, military rank, and serial number;
- The desired date that military retired pay is to stop (the day before annuity begins); and
- A request that the Military Finance Center notify OPM of the effective date of the waiver.
- Attaches a copy of the waiver request to SF 3107, Application for Immediate Retirement. If acknowledgment of the waiver is received from the Military Finance Center before the retirement application is submitted to OPM (through the Eagan ASC), attaches a copy of the acknowledgment of the waiver.
Employees who elect to transfer to FERS and have 5 or more years of creditable civilian service prior to their transfer have both frozen creditable service under CSRS and creditable service under FERS. Previously, employees who separated and withdrew their retirement contributions permanently forfeited all credit for FERS time and could never redeposit the FERS contributions.
Under the National Defense Authorization Act for Fiscal Year 2010, employees covered by FERS on or after October 28, 2009, are permitted to repay (or redeposit) any FERS deductions previously refunded to them. They may also redeposit any CSRS deductions previously refunded to them that covered CSRS service credited under FERS rules.
